Suppliers paid R600m for no work in scheme to dupe Treasury, Zondo Inquiry told
The state capture commission of inquiry has heard how more than R600 million budgeted to build houses for the poor in the Free State was paid to suppliers despite no work being done.
PRETORIA - The state capture commission of inquiry has heard how more than R600 million budgeted to build houses for the poor in the Free State was paid to suppliers despite no work being done.
This was part of a scheme to dupe the National Treasury into believing the province’s 2010 housing budget had been spent and to ensure it was allocated more funds the following financial year.
This was the evidence of former Free State MEC Mxolisi Dukwana on Wednesday, who dubbed the scheme "the great housing heist".
Dukwana described the province as being a hotbed of corruption, which was built on a network of patronage that had its roots in the office of the former premier, Ace Magashule.
For a department to be allocated funds for a financial year it must demonstrate to Treasury that it was spending its budget, or else the unused funds were transferred to better performing departments.
Dukwana said that in December 2010, the Free State housing department had spent only 10% of its budget but through a scheme ramped that up to 66% by January the following year.
"The department had already transferred several hundred millions of rands from its conditional location to suppliers. It continued to make unlawful transfers in January, February and March 2011. The transfers were made without the suppliers having supplied material, without written agreements in respect of all regulating the transfers and without proper procurement processes."
He said that about R631 million was simply given to suppliers in order to ensure the coffers were replenished with taxpayer money, ready to be siphoned off.